“Going forward, with the output gap improving steadily, firms’ stance is likely to gradually shift toward raising wages and prices,” Kuroda said in a lecture at the University of Zurich. “If further price rises come to be widespread, inflation expectations are likely to rise steadily.”

“The Bank will continue to persist with powerful monetary easing to ensure that such positive developments are not cut short,” he added. (Reporting by John Revill; Writing by Balazs Koranyi)